What Would a Single Payer Healthcare System Look Like?

Single-payer healthcare is having a moment. Bernie Sanders, the left-wing Senator from Vermont whose presidential bid has garnered a surprising amount of support, has made a Medicare for all, single-payer system a central part of his platform. His reason? “We are the only major country on earth that doesn’t guarantee healthcare to all people as a right and yet we end up spending much more than they do.”

Donald Trump wrote fifteen years ago that, “We need, as a nation, to reexamine the single-payer plan, as many individual states are doing.” He addressed that view in the first Republican presidential debate in August by acknowledging that single payer “works in Canada. It works incredibly well in Scotland. It could have worked in a different age.” He no longer supports the idea for the United States, however, saying that it would have worked well in a previous era.

On a basic level, single-payer healthcare is the idea that the government, rather than the current array of private insurance companies, should pay for everyone’s healthcare. The government would not provide healthcare directly, but would instead extend the popular Medicare program, which is for the elderly, to Americans of all ages. People would keep their doctors, but the doctors would be paid in a different way.

Among the several major barriers to moving toward such a system: the private insurance companies are large and have powerful lobbying presences in Washington. The idea of eliminating their role in the market would be a tough sell. In addition, most employers have existing contracts with private insurance companies to cover their employees. That system of employer-sponsored insurance is deeply entrenched. The struggle to pass the Affordable Care Act might be a walk in the park compared with meeting the needs of all interested stakeholders under a new single payer system.

At the same time, the United States is the only industrialized nation in the world that does not provide guaranteed healthcare coverage for its citizens. And although some believe the chance to implement a single payer system is fading, since the Affordable Care Act has helped millions of new health insurance consumers buy private plans over the past few years, some prominent voices remain optimistic. At the same time, many others doubt the feasibility and wisdom of implementing a single-payer system.

There are strong and knowledgeable advocates on both sides of the debate.

Dr. Walter Tsou is the past President of the American Public Health Association and past Health Commissioner of Philadelphia. In 2009, he testified before the U.S. House of Representatives subcommittee on health (see video or read transcript) in favor of a “properly financed, single-payer national health insurance program.”

In a phone interview, Dr. Tsou said, “In the last 10 years, we have seen a sea change in public attitudes about gay marriage. I think we’re going to see a similar sea change as people understand that the complexity of our current healthcare system is man-made, unnecessary, and extremely expensive and wasteful.”

He continued, “Churchill said that Americans always manage to do the right thing after they’ve exhausted all other possibilities first. My feeling is that the Affordable Care Act is the last-gasp try at doing the wrong things first before people will finally figure out that there is a much more efficient, logical, straightforward, and simple way of financing our healthcare system.”

Avik Roy, a senior fellow at the Manhattan Institute and Forbes opinion editor, has long been a forceful voice against single-payer. He instead supports moving current Medicaid and future Medicare beneficiaries onto the insurance exchanges that sell private coverage. Roy has written before that “the dream of single-payer health care in the U.S. is dead for the foreseeable future” because we have learned that “slashing payments to hospitals, doctors, and drug companies – the only way to finance single-payer coverage – is politically impossible.”

In August 2014, Roy published his plan, titled “Transcending Obamacare: A Patient-Centered Plan for Near-Universal Coverage and Permanent Fiscal Solvency.” The plan reflects bedrock conservative ideas: increasing patient responsibility for the cost of care through higher deductibles and cost-sharing, fostering more competition between insurers in the marketplace, transitioning more traditional Medicare patients into private Medicare Advantage plans, and providing premium support for the poorest consumers to purchase private coverage instead of relying on Medicaid.

Roy’s ideas are in stark contrast to the ideas of single payer healthcare, whose advocates believe that a national, centralized system of medical claims and reimbursement would make the healthcare system simpler. If there is one question that will decide whether the United States shift toward or away from single payer, it is this: would patients receive more value – measured in cost, quality and ease of access to care – from a competitive, fragmented private system or from a consolidated, unified public system?

That is a difficult question to answer in theory, but Vermont recently made an attempt to transition to single payer that might be illustrative of what would happen elsewhere. After years of analysis from respected health economists and broad political support across the state for a single payer system, the plan was a “no go” because it would require a 160 percent increase in corporate payroll tax.

Peter Shumlin, the Governor of Vermont, said from the start: “If Vermont gets single-payer health care right, which I believe we will, other states will follow. If we screw it up, it will set back this effort for a long time.”

Although transitioning our $2.7 trillion healthcare system to single payer overnight would involve significant change and disruption, advocates see a moderate, phased approach as more likely to work. One idea is to lower the Medicare coverage threshold gradually: by 2020 it would be 60, by 2025 it would be 55, and so on until all adults are covered. Other advocates have suggested making all primary care visits single payer.

Dr. Tsou summed up the battle of ideas between single payer advocates and privatization advocates: “We agree on the problems, but our solutions are different.”

NOTE: The views expressed here are those of the authors and do not necessarily represent or reflect the views of Healthcare, Inc. and HealthCare.com

About Imran Cronk

Imran is a contributing writer for HealthCare.com and has covered healthcare topics for The Atlantic, the Wharton Public Policy Initiative, and the Leonard Davis Institute of Health Economics. He is a research assistant at the University of Pennsylvania examining health economics, with a focus on health policy research and quality/safety improvement.

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